Japan and Venezuela eye more bilateral cooperation in energy sector

Jun 02, 2009 02:00 AM

Japan and Venezuela plan to launch a bilateral working group in the next few months to look at various opportunities
including development of the oil-rich Orinoco belt, upstream gas sector and financing of energy projects in
Venezuela, sources close to the matter told.
Japan's Minister of Economy, Trade and Industry Toshihiro Nikai and Venezuelan oil minister Rafael Ramirez,
officially agreed to launch the bilateral working group at a meeting in Tokyo, sources said. METI's natural resource
agency director-general, Toru Ishida, and Venezuela's Deputy Oil Minister Ivan Orellana will jointly chair the
working group, sources added.

Ramirez's visit to Tokyo over May 29-31 was the third in three months and is seen as a bid to push forward previous
agreements with Japanese companies and the government's energy financing arms. Ramirez met senior executives of
various Japanese companies that want to expand their energy businesses in Venezuela.
Meanwhile, concerns are growing among Japanese companies and the government regarding the futures of their
investments in the wake of Venezuela's attempts to nationalize the oil sector and now iron companies too, sources
said. President Hugo Chavez announced May 21 that several iron companies would be nationalized, a big blow to
Japanese trading houses that also run steel and metals businesses, sources added.

There has been a slew of agreements between Japanese and Venezuelan companies as well as governments in the energy
sector. Japan and Venezuela signed an MoU on energy cooperation March 19. On April 6, Ramirez, who also heads
state-owned oil company PdVSA, signed a memorandum of understanding with Japan Oil, Gas and Metals National
Corporation on oil and gas development.
PdVSA also agreed to conduct a two-year joint study on onshore development in the Orinoco belt with it as well as
upstream player Inpex and trading house Mitsubishi. It also signed a memorandum of understanding with Japanese
trading houses Mitsubishi, Mitsui, Itochu and Marubeni on the development of gas fields offshore Proyecto Mariscal
Sucre region.

This followed PdVSA, US major Chevron, Mitsubishi, Mitsui and some other oil companies signing an agreement in March
to develop the Delta Caribe LNG project.
State-owned Japan Bank for International Cooperation also signed an MoU to lend Venezuela's state-owned oil company
PdVSA $ 1.5 bn to expand its 140,000 bpd El Palito and 200,000 bpd Puerto La Cruz refineries.